GM and Union Reach Tentative Deal That Could End Strike

Terms of the tentative four-year contract were not released, but it's likely to include some pay raises, lump sum payments to workers, and requirements that GM build new vehicles in U.S. factories

Published October 16, 2019•Updated on October 16, 2019 at 12:37 pm

AP

Bargainers for General Motors and the United Auto Workers reached a tentative contract deal on Wednesday that could end a monthlong strike that brought the company's U.S. factories to a standstill.

The deal, which the union says offers "major gains" for workers, was hammered out after months of bargaining but won't bring an immediate end to the strike by 49,000 hourly workers. They will likely stay on the picket lines for at least two more days as two union committees vote on the deal, after which the members will have to approve.

Terms of the tentative four-year contract were not released, but it's likely to include some pay raises, lump sum payments to workers, and requirements that GM build new vehicles in U.S. factories. Early on, GM offered new products in Detroit and Lordstown, Ohio, two of the four U.S. cities where it planned to close factories.

The company offered to build a new electric pickup truck to keep the Detroit-Hamtramck plant open and to build an electric vehicle battery factory in or near Lordstown, Ohio, where GM is closing an assembly plant. The battery factory would employ far fewer workers and pay less money than the assembly plant.

GM and the union have been negotiating at a time of troubling uncertainty for the U.S. auto industry. Driven up by the longest economic expansion in American history, auto sales appear to have peaked and are now heading in the other direction. GM and other carmakers are also struggling to make the transition to electric and autonomous vehicles.

Meanwhile, President Donald Trump's trade war with China and his tariffs on imported steel and aluminum have raised costs for auto companies. A revamped North American free trade deal is stalled in Congress, raising doubts about the future of America's trade in autos and auto parts with Canada and Mexico, which last year came to $257 billion.

Amid that uncertainty, GM workers have wanted to lock in as much as they can before things get ugly. They argue that they had given up pay raises and made other concessions to keep GM afloat during its 2009 trip through bankruptcy protection. Now that GM has been nursed back to health — earning $2.42 billion in its latest quarter — they want a bigger share.

If approved, the contract agreement will set the pattern for negotiations at Fiat Chrysler and Ford. It wasn't clear which company the union would bargain with next, or whether there would be another strike.

The union's bargainers have voted to recommend the deal to the UAW International Executive Board, which will vote on the agreement. Union leaders from factories nationwide will travel to Detroit for a vote on Thursday. The earliest workers could return would be after that.

In past years, it's taken a minimum of three or four days and as long as several weeks for the national ratification vote. Workers took almost two weeks to finish voting on their last GM agreement, in October of 2015. Then skilled trades workers rejected it, causing further delays.

"The No. 1 priority of the national negotiation team has been to secure a strong and fair contract that our members deserve," union Vice President Terry Dittes, the chief bargainer with GM, said in a statement Wednesday. The agreement, he said, has "major gains" for UAW workers.

This time around — with a federal corruption investigation that has implicated the past two UAW presidents and brought convictions of five union officials — many union members don't trust the leadership and likely won't want to return to work until they've gotten a chance to vote on the deal themselves.

In August, the FBI raided the suburban Detroit home of UAW President Gary Jones. He has not been charged and has not commented on the raid. Earlier this month, Jones' successor as union regional director in Missouri was charged in a $600,000 embezzlement scheme, and another UAW official pleaded guilty to taking kickbacks from union vendors. Eight other people — including five UAW officials — have been convicted over the past two years of looting a jointly run Fiat Chrysler-UAW training center for blue-collar workers. Another official was charged in September.

There's also no guarantee that the first contract deal with GM will pass. Some workers on the picket lines have said they may not vote for the first offer.

"We're not just going to take the first thing that they give us," worker Tina Black said last month from the picket line at an engine and transmission plant in Romulus, Michigan, near Detroit's main airport.

But Louis Rocha, president of a UAW local in Orion Township, Michigan, said recently that union bargainers have taken strong positions against the company. "I think we're going to be OK," he said of the ratification vote.

The strike had shut down 33 GM manufacturing plants in nine states across the U.S. It was the first national strike by the union since a two-day walkout in 2007 that had little impact on the company.